The current property market is displaying interesting new trends - and while there has been no significant increase in new stock volumes, under-resourced spec buyers are finding it far more difficult to operate.
First-time home buyers are taking advantage of the cheaper finance to acquire more expensive properties, with such buyers accounting for almost 53% of home loans during the second quarter, according to ooba.
South Africa’s young population, with nearly two-thirds of citizens currently below the average age of a first-time buyer (34 years), provides the market with a solid underpinning, as conditions now make it cheaper to buy than rent.
What we have seen is that the residential property market has come out of the gates very strongly after the restart of real estate activities at the beginning of June and during July 2020, with most of this activity driven by realistic pricing expectations and motivated sellers.
However, to temper any expectations of an unrealistically buoyant property market, it is important to note that "there has not been any significant increase in new stock volumes coming onto the market, when compared to ‘normal volumes.
'Speculators having to offload'
Although the lower prices and even lower interest rates have created a real buyers’ market, "quick in-and-out buyers are no longer nearly as evident as they were 12 to 24 months ago".
It is very often these speculators who are now having to offload and thereby adding to lower prices. Typically, a spec buyer would move in on a new development showing all the signs of being successful, pay a fairly small initial deposit and buy with the expectation to sell his plot at a significant profit within 12 to 18 months or less, of taking transfer. By this time progress on the development is there for all to see and its popularity more obvious to the general public.